Union Pacific and Wabtec on Wednesday announced they have signed a landmark agreement totaling $1.2 billion to modernize the railroad’s fleet of AC4400 locomotives.
“This agreement represents the largest locomotive modernization investment in rail industry history, building on Union Pacific’s previous 2022 order which is scheduled to be completed in 2026,” Wabtec (NYSE: WAB) said in a release. “The upgraded fleet will help enhance the railroad’s operational efficiency, service reliability and network performance.”
The program covering 1,700 locomotives, or approximately 24% of UP’s total fleet, will extend each unit’s operating lifespan, improve fleet standardization and include next- generation control and diagnostics technologies. The upgraded locomotives are expected to deliver a more than 5% reduction in fuel consumption, 14% increase in tractive effort and an 80% improvement in reliability.
“We are committed to delivering the service we sold to our customers and one way we do that is having great American-made locomotives that can get the job done,” said Union Pacific (NYSE: UNP) Chief Executive Jim Vena, in the release “These redesigned locomotives will be just like new, providing the improved fuel efficiency and enhanced reliability that we need to grow with our customers and to win new business.”
The blockbuster deal comes as UP and Norfolk Southern (NYSE: NSC) prepare to re-file their $85 billion merger application with federal regulators. The partners have aggressively promoted what they claim will be double-digit gains in freight as a result of the merger after years of sparse growth. Vena has spoken publicly about UP’s keeping a buffer, or reserve, of hundreds of locomotives to accommodate surges in traffic.
“Our continued partnership with Union Pacific reflects a steady, forward-looking investment that positions the railroad and its customers for continued success,” said Rafael Santana, President and CEO of Wabtec. “By enhancing our proven locomotive platforms with advanced propulsion, controls and diagnostics, this program delivers substantial gains in performance, reliability and lifecycle value – allowing the railroad to unlock maximum efficiency and capability for its existing fleet.”
The six-axle, AC4400 (Alternating Current, 4,400-hp) was introduced by General Electric in 1993 and has sold more than 3,500 units. UP’s locomotives were delivered from 1994-2004, including some 279 acquired in its merger with Southern Pacific in 1995.
Each unit will receive the FDL Advantage (FDLA) engine upgrade for enhanced fuel savings; LOCOTROL® Expanded Architecture to support safe, efficient operation of longer trains and the new Modular Control Architecture providing data, diagnostics and software capabilities.
The agreement was signed in the fourth quarter of 2025, and marks UP’s fourth major modernization order with Wabtec since 2018. The work will be done at Wabtec’s Erie, Pa., and Fort Worth, Texas, facilities.
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